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accrual accounting vs cash based accounting pepe unchain Bnb Eth XRP crypto futures coinbase futures binance futures

What is the difference between accrual accounting and cash-basis accounting?

Under Accrual Accounting, revenue is recognized once earned, and expenses are recorded post-invoice, whereas Cash-Basis Accounting recognizes revenue and expenses only after the actual cash transfer. How Does Accrual Accounting Work?

What is the difference between cash and accrual accounting?

The difference between cash and accrual accounting lies in the timing of when sales and purchases are recorded in your accounts. Cash accounting recognizes revenue and expenses only when money changes hands, but accrual accounting recognizes revenue when it’s earned, and expenses when they’re billed (but not paid).

Why is accrual basis accounting better than cash basis accounting?

Accrual basis accounting can give you a more accurate picture of your business’s financial health because it takes your business’s unpaid expenses and your customers’ unpaid invoices into account. That means it does a better job than cash basis accounting of matching expenses and revenue to the correct time period in which they were incurred.

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